Finance When Buying a House or Save and Pay in Cash??

[@MyHomesteadingProjectChannel]

The main problem I see with this is that people who want to pay cash are not "Average". We live cheaper, save more & buy wiser. it is absolutely doable to pay cash for a home in the 10 yrs you are quoting to pay off a mortgage. it will also cost you less. No interest plus other origination costs not included in your figures.

[@frugalgreengirl]

I absolutely agree that there are instances where it is more easily done and can work for some. That's why I went on and on about it in the end of the video. Appreciation is a big deal though. We bought our house almost 12 years ago. It has well over doubled in value in that time. Yes, we paid some interest and origination fees, but certainly not over 125 thousand dollars worth, which is how much more our house is worth. Each person should do what they think works for them though! Sorry if you didn't like the video.

[@MyHomesteadingProjectChannel]

It's not that I didn't enjoy your video. For the average person wanting to live in a neighborhood it was a pretty good picture of the reality of buying. It makes sense in that case. I would just hate to see someone get a mortgage thinking that is the only way to get into a home. That it can't be done without wasting your life dreaming and saving to no avail. We are one of those people who are living below our means in order to pay cash for a home. It really can be done if you are willing to "live like no one else so later we can live like no one else" as Dave Ramsey puts it.

[@mooniebo2752]

Exactly. thank you.

[@mooniebo2752]

People like you and I homesteading can't used this "Average person" advice. Live well below your means (financially but not in quality) and you'll realize a debt free dream home in no time. This is how EVERYONE used to do it before. Mortgages are relatively new and yet our culture acts as if we can't live without them. Build your own home for goodness sake! lol

[@SSSS-so3yf]

Cash is the king. I am saving for cash purchase.

[@mooniebo2752]

These numbers don't consider one important factor. The way a home appreciates in value is by having the $$$ to maintain and upgrade it over the same time period for it to both retain its current worth and appreciate. ALSO, one understated advantage renters have, especially those who are living frugally and saving to purchase their home in cash, is that they don't have any additional, often times unexpected maintenance costs for when things break down, need to be replaced, etc etc. You are equating rent cost with mortgage cost when actual homeowners know you need to set aside an additional few hundred dollars a month on top of your mortgage cost to pay for these types of inconveniences WHEN (not if) they arise, or else take on more debt to fix the problem. You also did not consider additional costs of having a mortgage like homeowner's insurance. And you didn't consider additional costs for being a homeowner like property taxes. These costs make make the actual, real life monthly costs of financing a home WAY HIGHER than renting. Advice, people: If you're looking to buy a home, rent somewhere cheaply or get a roommate where you currently live. Get your costs way down so your home purchase comes sooner.

[@Myfrugallife]

Wow, I wish we had 70k income! That's a good number crunch. Also don't forget that the rents are constantly going up. Also, did your mortgage prices included the cost of tax and insurance? That could be about $300 a month, depending where you live. But the main savings about buying a house are: the right time to buy when the prices went down, like it was in 2008-2009, have at least 20% down to not have to pay PMI, and buy a fixer upper if you can do most of the work yourself without having to hire anybody.

[@frugalgreengirl]

I know, right? I wish we had that kind of income, and we both work, lol. Yes, my mortgage estimate included PITI.

[@Myfrugallife]

Thank you. Even though we don't have that kind of income, it is more important how much you save and increase your net worth. Some people make good incomes, but they have nothing to show for it, but debt.

[@Myfrugallife]

You work and have all these animals and have kids. Wow. I just started some part time job, and I just can't keep up with everything, especially now, on the summer.

[@PidasianHippie]

Very good, well thought out presentation! It is obvious that you have crunched all the numbers in preparing for buying your house.

[@justyna.1979]

I learn so much from your videos.Would you please do a video how you keep up with your house chores , gardening , animals etc. You seem to be very organized . I have 2 children and I feel like I am always behind with something... . Thank You

[@shelleynobleart]

Fantastic information, FGG. You didn't lose me and you gave me the overview that makes all the difference. Thank you.

[@slowrider30]

Someone who Is smart doesn't just let 100k sit in the bank they make their money work for them. Pretty biased against cash purchasing I would say

[@SKANDaR0875]

Mortgages are necessary evils and should be the last resort ( i.e if you are stuck with a rent that cost as much). People need to understand that when you get a mortgage you are basically slaving for the a banks, whatever you bought is not yours! You pay twice to 3 times the house price by the end of the mortgage term, especially with 30yr (minimum payements). if you can pay cash do it, the debt/credit cloture we live in is flawed. And lastly buy what i necessary and what you can afford.

[@smarthome2660]

I want to point out something you missed. The 30 year mortgage route, after it is paid off you will have paid more that the 500k you have if you saved that money due to interest added up. A $226k home will end up costing you more than double after 30 years. You do offer some great tips on saving and I wish you and your family best of luck on your plan to be done with your current mortgage. Another note: Once you are a homeowner, you have to pay property taxes. If you wait and save to pay cash, that money will be in the savings column too. This is fine for the average buyer and you offer a good plan comparison. I suggest people be "not" normal and start saving for a home to pay cash. Then while you are saving and waiting, get some skills involved in repairing an 'as is' home if you don't already know how to fix broken things in a home. Then when you are ready to buy a home, look for one that is drastically reduced due to damage and scoop it up with your cash. I bought my 5 bedroom home at 25% of its current value. Most of the equity in my home comes from sweat as I did all of the repairs and put very little cash out for repairs.

[@mattcaluda]

good job on explaining the loan, no loan conundrum.

[@howardcase4420]

Great video! We just went through a similar situation. We wanted out of town and into the country so we had to figure out our finances to be able to do that. Let me just say if you're going to buy a house and go the mortgage route be prepared to really really be scrutinized by the mortgage company. Just FYI

[@ilanmagen]

Nice one, Thank you T

[@Taharvey77]

great video

[@MosheAlvarez]

Fantastic video, Frugalgreengirl!

[@frugalgreengirl]

Thanks. I'm glad someone like it. Almost didn't put it out because it wasn't "good enough" (like I have done MANY times before).

[@MosheAlvarez]

Oh no, all your videos are very well thought out and informative. I'd be a lucky guy to have someone in my life with half your knowledge :)

[@MosheAlvarez]

This video actually touches on the thing we were talking about on your last video about me looking into moving out of California and you hit some of the very reasons I might want to move.To find a house in southern California for the average $236,000 in a nice neighborhood with a good schooling system would be close to impossible and although I don't currently have any children or married, this video really puts things into perspective and I appreciate your incredible knowledge on this topic :)

[@frugalgreengirl]

You know, our last conversation actually inspired some of what I said in this video. That and my frustration with the people who keep yelling that buying a house in cash is the only right way to do it. I'm afraid that some people might believe it and end up chasing a dream that may never happen. And don't worry, I'm sure the right person for you will come along at the right time 😊

[@MosheAlvarez]

+frugalgreengirl Wow, no kidding?! Thats so cool that I could influence you with making these great videos. I'm honored :) Thank you for your kind words and keep up the inspiring work that you do. I wish you and your family the best. Ttyl

[@charlesfarrar2299]

Would A&A be able to collect dividends on a low/no risk investment of their saved "cash" to keep up with appreciation?

[@Patriot11111]

Well done

[@lifesjourney1680]

*What if you already have the money to make a cash purchase? Should you buy one house outright? Or buy two, with a 50% deposit on both mortgages?*

[@munhl]

Why would a couple only save 15% of their income? If you are planning on paying cash for a house you would have to be saving near the 50% mark. Also, you are not taking in to account payrises, promotions, bonuses, inheritances, other investments. Mortgages are front-loaded with interest, and you end up paying 2 to 3 times the cost of a house with a typical mortgage.

[@caliland29]

First!

[@samanthathimote3705]

What that noise, sounds like someone frying something or she let the water on

[@CharlesLukoba]

You didn't consider property tax!

[@triflingfeed8635]

Do you have fish?

[@frugalgreengirl]

Yes, that's why there is an annoying water pump sound in the background of all these inside videos. Sorry about that.

[@DJmanuelperez3]

tax